Finance minister Arun Jaitley, set to present his maiden budget on Saturday, has the difficult job of making India regain its spot as an investors' darling, easing rules of doing business and signalling long-term economic reforms without hurting India's vast consuming class.
Besides, he has to grapple with a key question: how to create jobs for teeming millions that are joining the workforce.
Around noon on Saturday, you will probably get to know whether Jaitley has put more in your hands to spend. He is expected to raise the income tax exemption limit from the current level of Rs 2.5 lakh to about 3 lakh.
The objective: put more money into the hands of people. The hope: they will spend more on goods and services. The desired result: rising sales will prompt companies to invest in creating capacities. And the spin-off: they will hire more, thus, creating more jobs across the country.
Although it is less than a year in office, time is ticking for the new government to fulfil its poll pledge because it needs to create jobs, while the elbow room in the treasury remains in tight in the coming budget.
Jaitley has limited room to splurge anyway. The Centre now has to share a larger slice of its tax revenues — 42% from 32% earlier — with the states following the recommendations of the 14th finance commission-a Constitutional body mandated to define the formula of sharing resources between the Centre and states.
Jaitley also has to balance the budget books without knocking up prices. He has the option of earning extra revenues by raising service taxes and excise duties on consumer goods such as televisions and cars. This risk: it will fan inflation by immediately making most services such as a visit to the gym or a beauty parlour costlier.
The budget will also be keenly watched for on the government's stand on welfare handouts, subsidy reforms and measures to counter the rising perception that the current regime is "anti-farmer" given the changes it has proposed to make land buying easier for building roads and factories.
Nine months into office there are more than audible murmurs from among top corporate influencers who have said that the Narendra Modi government's tenure so far has been characterised by the lack of a grand vision or any striking changes.
Deepak Parekh, an eminent banker and Chairman of financial services giant HDFC, has recently said that impatience has begun creeping in among businessmen as nothing has changed on ground and there has been little improvement on 'ease of doing business' front so far.
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